ROYAL MULTIPLEX (P) LTD.,NEW DELHI V. ACIT CENTRAL CIRCLE-II, FARIDABAD

ITA 3456/DEL/2023

AI Insights

The case involves Royal Multiplex (P) Ltd. appealing against the consolidated order of the Commissioner of Income-tax (Appeals)-3, Gurgaon, which upheld the assessments made under sections 153C and 143(3) of the Income Tax Act, 1961. The primary contention was the jurisdiction and validity of the assessments for the years 2011-12 to 2017-18 following a search and seizure operation at the premises of the M3M group. The Tribunal examined the satisfaction notes recorded by the Assessing Officer (AO) and found procedural lapses and lack of specific incriminating material directly correlating to the assessment years in question, leading to the decision to quash the assessments for the specified years.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40224 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Other Referred Cases: CIT vs. Jasjit Singh, Shalimar Town Planner vs. ACIT, Marconi Infratech vs. ACIT, DCIT vs. Manglam Multiplex Private Ltd., Social Realtors (P) Ltd. vs. ACIT, Renu Singh vs. ACIT, Sakham Commodities Ltd. Vs ITO, CIT vs. Sinhgad Technical Education Society
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: S.S. NAGAR
• Keywords: Reassessment proceedings; Document seized; Documents seized; Search and seizure
• Section: 142(1); 143(2); 132; 153A; 153C

Judgement Text

" IN THE INCOMETAXAPPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI ANUBHAV SHARMA, JUDICIALMEMBER ITA Nos.3455 to 3460/DEL/2023 (Assessment Years :2011-12 to 2013-14 & 2015-16 to 2017-18) Royal Multiplex (P) Ltd., vs. ACIT, Central Circle II, Office no.2, Second Floor L-373, Fardiabad. Mahipalpur Extension, New Delhi – 110 037. (PAN: AAECR8742B) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri S.S. Nagar, Advocate Shri Gaurav Sachdeva, CA REVENUE BY : Shri Javed Akhtar, CIT DR Date of Hearing : 02.12.2024 Date of Order : 12.02.2025 O R D E R PER S. RIFAUR RAHMAN, AM : 1. The assessee has filed six appeals against the consolidated order of ld. Commissioner of Income-tax (Appeals)-3, Gurgaon (hereinafter referred to ‘Ld. CIT (A)’) dated 29.09.2023 for AYs 2011-12 to 2013-14 and 2015-16 to 2017-18. 2. Since the issues are common and the appeals are connected, therefore, the same are heard together and being disposed off by this common order. First 2 ITA Nos.3455 to 3460/DEL/2023 we take up ITA No.3455/Del/2023 for AY 2011-12 as lead case. 3. The assessee has taken the following grounds of appeal in AY 2011-12 :- “1. That the learned Commissioner of Income Tax (Appeals)- 3, Gurgaon has erred both in law and on facts in upholding the assumption of jurisdiction u/s 153C of the Act and, framing of assessment u/s 153AI143(3) of the Act. 1.1 That both the notice issued u/s 153C of the Act and assessment framed u/s 153C of the Act were without satisfying the statutory preconditions contained in the Act and therefore without jurisdiction and therefore deserves to be quashed as such. 1.2 That while upholding the assumption of jurisdiction the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since neither money, bullion, jewellery or other valuable article or thing belonging to the appellant and nor any books of accounts or documents pertaining to the appellant or any information contained therein relating to the appellant were seized as a result of search the assumption of jurisdiction u/s 153C of the Act was illegal, invalid and unsustainable. 1.3 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the assumption of jurisdiction despite the fact that in absence of any valid satisfaction having been recorded both in the case of searched person and, the appellant action u/s 153C of the Act was in excess of jurisdiction. 2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that addition made and upheld was without jurisdiction since there was no incriminating material detected as a result of search on the searched person. 3 That since no valid approval has been obtained u/s 153D of the Act, order of assessment made u/s 3 ITA Nos.3455 to 3460/DEL/2023 143(3)/153A(1)(b)/153C of the Act is invalid and deserves to be quashed as such. 4 That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in law in upholding an addition of Rs.94,81,404/- by applying rate of 1% is figure of Rs.9,48,14,0471- representing alleged income from commission on total credits and debits reflected in the bank statement of the appellant company. 4.1 That the learned Commissioner of Income Tax (Appeals) has proceeded on arbitrary assumptions and, presumptions and overlooked the evidence and, explanation tendered by the appellant company, the addition thus sustained is based on surmises, conjectures and suspicion and therefore untenable. 4.2 That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in recording various adverse inferences which are contrary to the facts on record, material placed on record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted. 4.3 That in any case and without prejudice that addition made is highly arbitrary and excessive and therefore unsustainable. Prayer It is therefore, prayed that, it be held that assessment made by the learned Assessing Officer and sustained by the learned Commissioner of Income Tax (Appeals) be quashed. It be further held that addition sustained by the learned Commissioner of Income Tax (Appeals) is not tenable and therefore be deleted and appeal of the appellant company may kindly be allowed.” 4. At the time of hearing, ld. AR of the assessee made submissions on jurisdictional issues raised by the assessee in Ground No.1 and sub-grounds. 4 ITA Nos.3455 to 3460/DEL/2023 5. The relevant facts relating to ground no.1 are, a search and seizure operation under section 132 of the Income-tax Act, 1961 (for short ‘the Act’) was conducted on 21.07.2016 at the residential as well as office premises of M3M group of cases by virtue of the authorization of the Pr. Director of Income Tax (Investigation), Chandigarh u/s 132(1) of the Act. Certain documents seized containing information pertaining to the assessee and the AO recorded his satisfaction that these documents have bearing on the determination of total income of the assessee. The case was centralized in Central Circle 2, Faridabad vide File No.CIT-7/Cent/156/2017-18/793 dated 30.08.2018 in pursuance to search and seizure action u/s 132 of the Act. Seized documents/materials in the group were received by the AO on 29.01.2018 from the DDIT (Inv.)-I, Gurugram. Accordingly, notice u/s 153C of the Act was issued to the assessee on 26.09.2018 requiring the assessee to file its return of income in respect of six assessment years including search assessment in which search was conducted in the group. In response, assessee filed its return of income u/s 153C of the Act on 26.10.2018 for the AY 2011-12. In the return of income, assessee has declared its income at Rs.Nil. Accordingly, notices u/s 143(2) and 142(1) were issued along with questionnaire to the assessee on 12.11.2018. 6. At the time of hearing, ld. AR brought to our notice satisfaction note 5 ITA Nos.3455 to 3460/DEL/2023 recorded by the AO of the assessee u/s 153C of the Act, which is placed on record at page 65 of the paper book, as per which the AO of the assessee has recorded the above satisfaction only on 25.09.2018. Accordingly, ld. AR of the assessee submitted that as per the settled position of law, relevant search assessment year for the person falling u/s 153C is the year in which the satisfaction note is recorded by the relevant AO. That be the case, the relevant search year for the assessee is AY 2019-20. In this regard, he brought to our notice CBDT Circular No2/2018 dated 15.02.2018 which is also placed at page 1 & 2 of the case law paper book and further he relied on the decision of CIT vs. Jasjit Singh 155 taxmann.com 154, decision of coordinate Bench in the case of Shalimar Town Planner vs. ACIT in ITA No.6305, 5128, 6307 & 2312/Del/2013 which is affirmed by Hon’ble Delhi High Court and Hon’ble Apex Court. Further he brought to our notice post amendment, the coordinate Bench decisions in the case of Marconi Infratech vs. ACIT in ITA No.3126 to 3132/Del/2023, DCIT vs. Manglam Multiplex Private Ltd. in ITA No.1093/Del/2024 and Social Realtors (P) Ltd. vs. ACIT in ITA No.3449 to 3454/Del/2023. 7. Considering the above facts on record, ld. AR of the assessee submitted that the AYs 2011-12 & 2012-13 are outside the assessment years which covers under section 153A of the Act and prayed that the assessment passed u/s 6 ITA Nos.3455 to 3460/DEL/2023 153C of the Act in the above two years is outside the jurisdiction and accordingly should be quashed. 8. On the other hand, ld. DR of the Revenue fairly accepted the said position of law that these two assessment years are outside the jurisdiction u/s 153A read with section 153C of the Act. 9. Considered the rival submissions and material placed on record. We observed that the AO of the assessee has recorded the satisfaction note on 25.09.2018. As per the provisions of section 153C r.w.s. 153A, relevant search assessment year for the other person is the assessment year in which this satisfaction note is recorded. Accordingly, the relevant search assessment year for the assessee is AY 2019-20. Accordingly, the assessment years under consideration i.e. AYs 2011-12 & 2012-13 are outside the jurisdiction of revision proceedings u/s 153A r.w.s. 153C of the Act. Accordingly, assessment orders based u/s 153A(1)(b) of the Act is accordingly quashed. Resultantly, ground no.1 raised by the assessee in AYs 2011-12 and 2012-13 are allowed. 10. The assessee has raised other grounds of appeal in AYs 2011-12 & 2012-13 raising other jurisdictional issue and on merits which are not adjudicated at this stage. 7 ITA Nos.3455 to 3460/DEL/2023 11. In the result, the appeals for AYs 2011-12 & 2012-13 are partly allowed. 12. Coming to the other appeals filed by the assessee relating for AYs 2013-14 and 2015-16 to 2017-18, in this regard, ld. AR of the assessee submitted that no doubt the AO of the assessee has recorded satisfaction note u/s 153C of the Act based on the seized material found during search and seizure operation u/s 132 of the Act carried out at Chamber No.Paras Twin Towers, Tower B,6th Floor, Golf Course Road, Sector 54, Gurgaon-122 002 belonging to M3M group identified as Annexure A-3. He submitted that the satisfaction note so prepared by the AO for the complete block period on 25.09.2018 for the AYs 2011-12 to 2017-18 u/s 153C r.w.s. 153A and submitted that this satisfaction note is illegal, void ab initio, barred by limitation and, therefore, liable to be quashed. In this regard, ld. AR of the assessee heavily relied on the decision of Renu Singh vs. ACIT in ITA No.2806 & 2810/Del/2024 dated25.11.2024 He placed a copy of the abovesaid order and further relied on the decision of Marconi Infratech vs. ACIT dated 21.06.2024. 13. On the other hand, ld. DR of the Revenue submitted that satisfaction note prepared by the AO is as per law and in this regard, he brought to our notice page 1 of the assessment order wherein AO has clearly brought on record that this case was centralized and pursuant to the search & seizure operation, 8 ITA Nos.3455 to 3460/DEL/2023 certain seized documents were found in the case of M3M group which clearly relate to the assessee. Accordingly, he has recorded the satisfaction. In this regard, he submitted that the satisfaction note does not require to be quantified at that stage which is similar to section 147/148 proceedings. In this regard, he relied on the findings of the ld. CIT (A) and brought to our notice pages 140 & 141 of the appellate order. 14. Considered the rival submissions and material placed on record. We observed from the record that this fact on record that the AO has recorded the satisfaction for the block period i.e. AYs 2011-12 to 2017-18 in the case of the assessee based on the information seized during the search and seizure operation in the case of M3M group. In the similar facts on record, we observed that the coordinate Bench in the case of Renu Singh vs. ACIT (supra) has considered similar aspect and quashed the proceedings u/s 153C by observing as under :- “17. The ‘satisfaction note searched person) being assumption of jurisdiction. It would be apt recorded hereunder:- “A search was conducted in the case of Shri Pranjil Batra on 17/08/2020. During the proceedings Pranjil Batra, incriminating documents were found and seized. There are various documents/ inform acquired huge wealth and has invested bank accounts in the names of various persons and entities. Most of these persons are related to Sh. Pranjil Batra or his employees. Most of the entities are paper entities and are controlled and managed by Sh. Pranjil Batra. However, in sake 9 ITA Nos.3455 to 3460/DEL/2023 of name Sh. Pranjil Batra has relatives/employees as directors/share holders in these entities. On perusal of such documents/information it has been observed that many of such information/ documents belongs to or pertains to the assessee as per brief description given under :- S.No. Premise/Party/Annexure / Page No. 1. Description of document sealed 1 Premise of Shri Pranjil Baua. F 193 Laxmi Nagar, New Delhi Sh. Pranjil Batra has entered into a transaction of sale/purchase of property with the assessee. As per incriminating documents and of sale deed agreement, has been evident that there is a huge difference in the consideration price as per agreement and sale deed. Further, cash exchange is also involved in this transaction. As per incriminating documents there is a difference of Rs.300 Lacs and cash exchange of Rs. 90 Lacs. Panchnama was signed on 18/08/2020. The above documents have been examined and I am, being the assessing officer of the searched person. satisfied that the information contained in documents seized during the course of search u/s 132 of the I.T. Act, 1961 at the premises of Shri Pranjil Batra, pertains to the assessee, who is a case of a person other than the person referred to in Section 153A i.e. Shri Pranjil batra, Hence, the information is being sent to the assessing officer of the such other person. Further, I am satisfied within the meaning of Section 153C r.w.s. 153A of the Act, that the doucemtns have bearing on the determination of 10 ITA Nos.3455 to 3460/DEL/2023 the total income of Renu Singh for the A.Y. 2015-16 to 2021- 22.” 18. The AO being common to the searched person as well as the assessee. The ‘satisfaction note’ prepared in the capacity of the AO of the searched person is identical and therefore, not reproduced. 19. Section 153C of the Act pertains to the assessment if income in cases where certain documents, assess or books of accounts etc. pertains to or relates to person other than the person on whom search was conducted under section 132A of the Act. This section allow the AO to initiate proceedings against any other person (not the searched person) if there are indications of undisclosed income. A key component of initiating search proceedings under section 153C of the Act is the ‘’satisfaction note’ to be recorded by the AO of the searched person as well as AO of the third person. The ‘satisfaction note’ is the first step and a foundational document to determine the validity of the assessment process against a third parties whose documents or assets etc. are found in a search. Satisfaction note is critical because it serves as a safeguard against arbitrary proceedings and ensures that the powers of section 153C of the Act is exercise judiciously. It is a formal statutory requirement without which the proceedings against other person could be considered invalid. The ‘satisfaction note’ being so critical and powers under section 153C of the Act being contingent upon such Note, the information contained therein need to be actionable. This being so, the ‘satisfaction note’ is expected to identify the relevant material found in search and that it pertains to or relates to third person. Such material found should reliably indicate or suggest the bearing of such documents/assets etc. to the income in the hands of third person. The ‘satisfaction note’ should record such material to provide accountability of the AO and to justify the initiation of proceedings against other person. In summary, such Note should set the narrative in an objective manner, as far as possible, to enable judicial scrutiny of such document, if so called for. 20. The assessee contends that ‘satisfaction note’ which is the first step for assumption of jurisdiction under section 153C of the Act and provides foundation for conferment of jurisdiction is plagued with 11 ITA Nos.3455 to 3460/DEL/2023 infirmities. Viz: [i] the ‘satisfaction note’ has been recorded by the Assessing Officer of searched person and that of assessee collectively for the period AY 2015 to AY 2021-22 without identifying the incriminating material in respect of any particular Assessment Year; [ii] the AO has thrown open the whole basket of six years without giving reference to any concrete incriminating material of a particular assessment Year; [iii] the act of the AO making sweeping averment in the satisfaction note that documents have bearing on determination of total income of Smt.Renu Singh for AY 2015-16 to 2020-21, is without legal foundation as the AO has even failed to name the alleged documents and further failed to mention as to how it is related/pertained to which Assessment Year; [iv] the AO on receipt of material/documents from the AO of the searched person must necessarily apply his mind on the material received and ascertain precisely the specific year to which incriminating material relates. It is only when this determination/ascertainment is complete that the flood gates of an assessment would open qua those particular years. The issuance of notice cannot be an automated function unconnected to this exercise of analysis and ascertainment by the Assessing Officer in the light of judgement rendered in the case of DCIT [2023] 157 taxmann.com 242 (Madras); (v) the ‘satisfaction note’ do not provide any particulars of documents seized from the premises of Shri Pranjil Batra. Nothing is mentioned with regard to Annexure No., page no. of the panchnama through which the documents were seized and the basis which prompted the AO to record satisfaction that the same pertains to the assessee herein. The basic facts such as nature of documents, type of documents, name of parties, amount of transaction, assessment year to which such document relate to etc. is not discernible from the satisfaction note. In the 12 ITA Nos.3455 to 3460/DEL/2023 absence of such information, no reasonable person instructed in law can derive his independent satisfaction which impacts the foundational jurisdiction to assess third persons. The ‘satisfaction note’ also fails to unequivocally ascertain whether it is the sale transaction or a purchase transaction of the property. The AO has used both the expressions i.e. purchase and sale for the impugned transactions in the satisfaction note; [vi] the ‘satisfaction note’ do not even mention the details of co- seller or address of the property to which alleged documents belong to; [vii] the ‘satisfaction note’ has made an allegation of cash exchange of INR 90,00,000/- but the assessment order refers to an altogether different figure of INR 3,00,35,000/-; and [viii] the ‘satisfaction note’ is clearly very generic and devoid of any basic detail of the transaction in question. 21. We find potency in, the plea of assessee towards allegation of infirmities in the ‘satisfaction note’. The Hon’ble Delhi High Court in the case of Sakham Commodities Ltd. Vs ITO 161 taxmann.com 485 (Delhi) deftly expounded the imperatives of a ‘satisfaction note’, incriminating material in respect of particular AY will not automatically confer jurisdiction to invoke section mentioned therein. The Hon’ble Delhi High Court further observed that discovery of material for a particular AY is not intended to trigger a chain reaction or have a water fall effect on all the AYs which can form part of the 'relevant AYs' under section 153C Of the Act. The Hon'ble Delhi High Court underscored well settled distinction which the law recognizes between the existence of power and the exercise thereof and thus, held that unless the AO is satisfied that the material gathered can potentially impact the determination of total income, it will be abrupt exercise of powers in mechanically re-opening or assessing all over again of the AYs covered in the block that could possibly form part of block of relevant AYs. For holding so, the Hon'ble Delhi High Court relied upon the judgement delivered by the Hon'ble Supreme Court in the case of Sinhgad Technical Education Society wherein the Hon'ble Supreme Court held that 'the assessment under section 153C could be 13 ITA Nos.3455 to 3460/DEL/2023 made only for the year to which material relates to and exercise of power under section 153C of the Act in respect of other AYs would not sustain'. The Hon'ble Delhi High Court also noted that the AO is bound to ascertain and identify the AY to which the material recovered relates and AYs which can then be subject to action under section 153C of the Act will have to be necessarily those in respect of which the assessment is likely to be influenced or impacted by the material discovered. The Hon'ble Delhi High Court went one step further to hold that where material discovered in the course of search has the potential of constituting incriminating material for more than one AYs, even in such a situation, it will be incumbent upon the AO to duly record reasons that material is likely to be incriminating for more than one A Y and thus, warranting the action under section 153C of the Act for years in addition to those to which material may be directly relatable. Thus, a nuanced application of mind and recording of reasons for drawing satisfaction as contemplated under section 153C of the Act qua different AYs is paramount. The Hon'ble Delhi High Court noticeably held that issuance of a notice under section 153C of the Act is clearly not intended to be an inevitable consequence to the receipt of material by the Jurisdictional AO and that the initiation of action under section 153C of the Act will have to be founded on a formation of opinion by the Jurisdictional AO that the material handed over and received pursuant to a search is likely to influence the determination of total income and would be relevant for the purposes of assessment/re-assessment in terms of section 153C of the Act. 22. The observation of the Hon'ble Delhi High Court noted above, clearly provides vehement support to the plea taken by the assessee on aspects of jurisdiction flowing from 'satisfaction note'. The 'satisfaction note' under scrutiny defies most of the parameters expected of him while drawing satisfaction. While exercising the power under section 153C of the Act, neither has the AO related the material found in the course of search with a particular AY while making a consolidated 'satisfaction note' nor provided any requisite details of transaction to enable an independent person to ascertain and form any independent' opinion on facts stated in Note that invocation of section 153C of the Act is indeed warranted in the facts of the case. Mere drawing of a perfunctory satisfaction without 14 ITA Nos.3455 to 3460/DEL/2023 meeting basic ingredients of providing some tangible & descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s 153C of the Act on a person other than searched person. The jurisdiction assumed based on such lackadaisical 'satisfaction note' beset with vital infirmities cannot be countenanced in law. The objection raised on behalf of the assessee towards lack of jurisdiction based on cryptic and non-descript satisfaction thus deserves to be sustained. While recording a consolidated 'satisfaction note' is not a bar in law per se as rightly contended on behalf of the revenue, but however, in the same vain, the documents/assets searched need to be specified against each year covered in the satisfaction note to depict application of mind and initiation of action under section 153C of the Act qua such assessment years. The AO has failed to do so. As a corollary, the notice issued under section 153C of the Act and consequent assessment order passed under section 153C of the Act is vitiated in law and requires to be quashed.” 15. Further we observed that in the exactly similar facts on record, in the group concerns of the search proceedings, coordinate Bench has considered the similar facts in the case of Marconi Infratech (supra) and held as under :- “16. Apart from the above fact, the Learned Counsel appearing for the assessee submitted before us that the Learned CIT(A) erred in law and also in fact in upholding the assumption of jurisdiction in the absence of a valid satisfaction note recorded in the case of searched person and the appellant under Section 153C of the Act. Rather the same is issued in access of jurisdiction. In this regard, he has taken us to the satisfaction note recorded by the ACIT, Central Circle – II, Faridabad dated 30.10.2018 in respect of the entire block period commencing from A.Ys. 2011-12 to 2017-18 appearing at page 88 of the paper book filed by the assessee before us. The contest whereof is as follows: “Reasons/Satisfaction note for taking up the case of M/s. 15 ITA Nos.3455 to 3460/DEL/2023 Marconi Infratech Pvt. Ltd. under section 153C of the Income Tax Act, 1961 Name and address of the Assessee M/s. Marconi Infratech Pvt. Ltd. Asst. Year 2011-12 to 2017-18 PAN AAGCM1219E Status Company By virtue of the authorization of the Director of Income Tax (Investigation), Chandigarh, a search & seizure operation u/s 132 of the Income Tax Act, 1961 (hereinafter called ‘the Act’) was carried out associated with the M/s. M3M Group. 2. During search & seizure operation u/s 132 of the Income Tax Act carried out at Chamber No.Paras Twin Towers, Tower B, 6th Floor, Golf Course Road, Sector 54, Gurgaon 122002 belonging to M3M Group seized material i.e. Annexure A-3 was seized from the aforementioned premises. 3. In view of the above and as per the provisions of sub section (1) of the section 153C of the Act, I am satisfied that the document seized as mentioned above contains information relating to the assessee M/s. Marconi Infratech Pvt. Ltd. and will have bearing on the Marconi Infratech Pvt. Ltd. Accordingly, after consideration, it is decided to issue such other person (M/s. Marconi Infratech Pvt. Ltd.) notice as per provisions of Section 153C r.w.s 153A of the Act. Date : 31.10.2018 Sd/- [SUDEEP DABAS] Asstt. Commissioner of Income Tax, Central Circle – II, Faridabad” 17. It appears from the above satisfaction note that the material being Annexure A-3 belonging to M3M Group was seized during the search and seizure operation under Section 132 of the Act carried out 16 ITA Nos.3455 to 3460/DEL/2023 at Chamber No. Paras Twin Towers, Tower-B, 6th Floor, Golf Course Road, Sector – 54, Gurgaon – 122002. It was further noted by the Learned AO that he is satisfied by the said documents seized containing information relating to the Marconi Infratech Pvt. Ltd. and the same have bearing on the determination of the total income for the A.Ys. 2011-12 to 2017-18 of M/s. Marconi Infratech Pvt. Ltd. and therefore, decided to issue notice to that other person being the assessee before us under Section 153C r.w.s 153A of the Act. The satisfaction note is, thus admittedly fails to demonstrate the details of the information contained in the Annexure A-3 which could lead to recording of satisfaction that the same have bearing on the determination of the total income of the assessee. The reason assigned to the satisfaction note is, thus, not found to be logical, rather vague. 18. A decision of the Hon’ble Supreme Court in the case of CIT vs. Singhad Technical Education Society [2017] taxmann.com 146 (Delhi) as relied upon by the Learned AO already settled the issue and held this to be an essential requirements as submitted by Learned AR. The relevant para of the same are reproduced as under: “(18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the 17 ITA Nos.3455 to 3460/DEL/2023 order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred.” 19. In that particular of case, the assessee raised the additional ground questioning the validity of the notice under Section 153C of the Act on the ground that the satisfaction note was not properly recorded and also the notice under Section 153C of the Act was time barred in respect of A.Ys.2001-02 and 2003-04. The Tribunal allowed the assessee to raise issues against such Assessment Years and decided the issue in favour of the assessee by quashing the notice issued in respect of the said Assessment Years. It was held that the documents as claimed to be incriminating material, should establish co-relation with the Assessment Years in questions, in default the notice issued under Section 153C of the Act is not maintainable. With the above observation, the order passed by Tribunal quashing the notice under Section 153C of the Act was upheld. 20. In the case in hand the satisfaction note simply referred the seized material i.e. Annexure A-3 seized during the search and seizure operation carried out on 21.07.2016 at Chamber No. Paras Twin Towers, Tower-B, 6th Floor, Golf Course Road, Sector – 54, Gurgaon – 122002. Whereas from the plain reading of the language of Section 153C of the Act and judicial pronouncement cited hereinabove it is abundantly clear that in order to reopen assessment of the other person under Section 153C of the Act for the Assessment Year earlier to the year of search, direct co relation must exist between existence of incriminating material and relevant Assessment Year. Therefore, the reasoning should be logical while recorded satisfaction; the same must be valid having regard to the provision of Section 153C of the Act. The Annexure A-3 as relied upon by the Learned AO being the seized document neither even speaks about the issue in respect of the respective Assessment Year sought to be reopened which could ultimately be said to be unexplained and addition thereon could be 18 ITA Nos.3455 to 3460/DEL/2023 made. It is an undisputed fact that these documents did not establish co relation, document wise with these six Assessment Years. The very essential element for invoking the provision of Section 153C is therefore, found to be missing. In that view of the matter, the reason assigned by the Learned AO while recording satisfaction is not found to be logical one rather vague; the material seized does not properly disclosed how the same belongs to be appellant; neither has it established any co relation document wise with these Assessment Years sought to be reopened and finalized upon making addition thereon. We, thus, respectfully relying upon the judgment passed by the Hon’ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (supra) do not find any force in such satisfaction note recorded by the Learned AO as the said is recorded not in terms of the provision of Section 153C of the Act and thus, found to be invalid. The entire reassessment proceedings under Section 153C of the Act are, therefore, quashed.” 16. Respectfully following the above decisions, we are inclined to hold that the satisfaction recorded by the AO for the block period for AYs 2011-12 to 2017-18 to initiate the proceedings u/s 153C of the Act through which it was sought to be reopened which could ultimately be said to be unexplained addition thereon could be made. We also hold that it is undisputed fact that these documents did not establish correlation document-wise with these assessment years under consideration. The very essential element for invoking the provisions of section 153C is, therefore, found to be not present in the impugned satisfaction note prepared by the AO. Accordingly, ground no.1 raised by the assessee is allowed. 19 ITA Nos.3455 to 3460/DEL/2023 17. The assessee has raised other grounds of appeal regarding approval granted u/s 153D and on merits which are not adjudicated at this stage. 18. In the result, appeals filed by the assessee for AYs 2013-14 and 2015-16 to 2017-18 are partly allowed. 19. To sum up : all the appeals filed by the assessee for AYs 2011-12 to 2013-14 and 2015-16 to 2017-18 are partly allowed. Order pronounced in the open court on this 12th day of February, 2025. Sd/- sd/- (ANUBHAV SHARMA) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 12.02.2025 TS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals)-3, Gurugram. 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "